RTTNews - Stock prices surged higher on Friday in the Japanese market on strong cues from Wall Street and better-than-expected March machinery orders data. Stocks across various sectors are moving up sharply and the benchmark Nikkei 225 index is currently trading at 9,221, up 127.10 points over its previous close. The Nikkei had closed 247 points or 2.64% down at 9,094 in the previous session.
Machinery orders for March fell 22.2 percent year-on-year, but the fall was smaller than what was forecast earlier.
In another economic news, Japan's corporate goods price index sank 3.8% year-on-year to 103.6 in April, marking the steepest fall since June 1987, reflecting slumping demand and plunging raw materials prices. On a month-on-month basis, the index dipped 0.4% for the eighth consecutive decline.
Bank stocks are up sharply, with Sumitomo Mitsui Financial Group, Shizuoka Bank, Chiba Bank, Bank of Yokohama, Sumitomo Trust and Banking and Fukuoka Financial Group posting handsome gains. Resona Holdings, Mitsubishi UFJ Financial Group and Chuo Mitsui Trust Holdings are also trading higher.
Mizuho Financial Group is currently trading 2% down from its previous close. The bank is reportedly finalizing plans to raise around 800 billion yen to boost its capital. As part of the exercise, the group is considering offering around 200 billion yen in preferred subscription securities by the end of September.
Among automobile stocks, Toyoto Motor Corp., Nissan Motor, Isuzu Motors and Suzuki Motor Corp. are trading firm.
Construction and real estate stocks are trading higher. Foods, pharmaceuticals, machinery and steel stocks are mostly trading firm with sharp gains. Shares from insurance, electric power, textiles and services sector are also finding support.
Shares of electronics maker Sony Corp. moved up sharply after the company forecast a small than expected loss for the current year. For the year ending in March 2010, Sony sees a 6% drop in group sales to 7.3 trillion yen and an operating loss of 110 billion yen. Its net loss will likely come to about 120 billion yen. The company has refrained from releasing dividend payout plans.
Sony Corp. suffered a group net loss of 98.9 billion yen in the year ended March 31, on falling prices of LCD televisions and other electronic products. A stronger yen and weaker-than-expected video game system sales also contributed to the loss. The firm had posted a profit of 369.4 billion yen a year earlier. With sales tumbling down by 13%, Sony posted an operating loss of 227.7 billion yen, a sharp reversal from a 475.2 billion yen operating profit a year earlier. The firm intends to close three domestic and two overseas production bases by December as part of its streamlining efforts.
In the currency market, the Yen is trading at 95.88 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Australia, New Zealand, Singapore, Taiwan and Korea are trading with strong gains. Shanghai is trading modestly higher.
Stock markets across the Asia-Pacific region saw notable weakness on Thursday following the sell-off seen on Wall Street overnight. Most of the indices in the region had ended sharply lower on widespread selling.
However, major European markets ended the day above the unchanged line, benefiting from some late day strength. The U.K.'s FTSE 100 Index rose 0.7 percent, while the French CAC 40 Index and the German DAX Index edged up 0.1 percent and 0.2 percent, respectively.
On Wall Street, despite a bigger than expected increase in unemployment claims for the week ended May 9th, stocks surged higher on Thursday as traders went bargain hunting after recent setbacks.
Finishing off their highs, the Dow and Nasdaq gained 46.43 points and 25.02 points respectively and the S&P 500 closed up 9.15 points.
According to the data released by the Labor Department, initial jobless claims rose to 637,000 from the previous week's revised figure of 605,000. Economists had been expecting jobless claims to edge up to 610,000 from the 601,000 originally reported for the previous month.
Additionally, the report showed a continued increase in continuing claims, which rose to a new record high of 6.560 million in the week ended May 2nd from the preceding week's revised level of 6.358 million. The continued increase in continuing claims reflects an ongoing hiring freeze.
In other economic news, producer prices increased by a little more than expected in the month of April, according to a separate report released by the Labor Department, with the increase in prices partly due to a rebound in food prices.
A slew of economic data is scheduled to be released on Friday, including the Labor Department's report on consumer price inflation in the month of April. Economists expect consumer prices to come in unchanged after edging down 0.1 percent in March. Trading could also be impacted by the release of reports on industrial production, consumer sentiment, and regional manufacturing activity.
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